Free cash flow takeaway
A quick read on the company's cash generation and what it means for investors.
Free cash flow turned positive this quarter, driven by a sharp reduction in capital expenditure. Operating cash flow improved modestly compared to both the prior quarter and the same quarter last year.
- Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow as a share of revenue improved, and with capital expenditure significantly reduced, free cash flow margin strengthened markedly from both comparison periods.
- Compared to the prior quarter, revenue was slightly lower while operating cash flow was higher, and capital expenditure dropped substantially, flipping free cash flow from negative to positive. Versus the same quarter last year, revenue and operating cash flow were both higher, capital expenditure was lower, and free cash flow improved.
FCF snapshot
Quarterly and TTM cash-flow metrics with the minimum valuation context.
TTM free cash flow
$94.5M
Trailing twelve-month free cash flow.
Quarter free cash flow
$241.8M
Free cash flow in the selected fiscal quarter.
Operating cash flow
$311.2M
Cash generated by operations before capital spending.
CapEx
$69.3M
Capital spending and related asset purchases.
FCF margin
35.8%
The share of revenue converted into free cash flow.
Cash flow trend
A short quarterly history shows whether FCF is scaling with revenue or only spiking for one period.
| Period | Revenue | Operating CF | CapEx | FCF | FCF margin |
|---|---|---|---|---|---|
| 2022-06-30 | -$487.7M | $372.1M | $193.1M | $179.0M | -36.7% |
| 2022-09-30 | $88.3M | $332.5M | $123.8M | $208.6M | 236.3% |
| 2022-12-31 | $686.1M | $288.6M | $823.6M | -$535.0M | -78.0% |
| 2023-03-31 | $675.5M | $311.2M | $69.3M | $241.8M | 35.8% |
Cash conversion quality
Checks that separate high-quality free cash flow from accounting noise or working-capital timing.
| FCF / net income | 238.9% | Shows whether accounting earnings convert into cash. |
| CapEx / revenue | 10.3% | Lower capital intensity usually supports FCF margin. |
| Net cash | -$12.7B | Cash and equivalents minus total debt. |
Recent events shaping cash flow
Near-term business events that help explain the free cash flow result.
Capital Expenditure Reduction
Capital expenditure was substantially lower than both the prior quarter and the same quarter last year, which was the primary factor behind the swing to positive free cash flow.
The reduction in capital expenditure directly improved free cash flow and free cash flow margin.
What the cash flow says
How to interpret the company's free cash flow beyond the headline number.
Revenue was slightly lower than the prior quarter but higher than a year ago. Operating cash flow as a share of revenue improved, and with capital expenditure significantly reduced, free cash flow margin strengthened markedly from both comparison periods.
Compared to the prior quarter, revenue was slightly lower while operating cash flow was higher, and capital expenditure dropped substantially, flipping free cash flow from negative to positive. Versus the same quarter last year, revenue and operating cash flow were both higher, capital expenditure was lower, and free cash flow improved.
Monitor the level of capital expenditure in upcoming quarters, as its volatility has a significant impact on free cash flow.